Extending Ghana’s Pension Scheme to the Informal Sector for Small and Micro Business Operators within Accra Business District: Challenge and Prospects

Abstract

The study examines the challenges and prospects for extending Ghana's Pension Scheme to the Informal sector for small and micro business operators within the Accra business district. Information for addressing the objectives of the study comes from small business operators as well as officials of the Ghana's Social Security and National Insurance Trust (SSNIT). Systematic Random Sampling technique has been employed in selecting small business operator's respondents while purposive sampling technique was used in targeting relevant SSNIT officials for their views on the study. Both interview guide and the questionnaire technique have been used as research instruments while statistical package for social studies (SPSS) has been employed to assist with data analysis. Constraints put forward by the small business operators which have the potential of kicking against their integration into the pension scheme ranged from their low income which will breach regular monthly contribution, frequent prosecution of contribution defaulters, relatively small returns (sometimes less than 10%) on SSNIT investments and the apparent high operating cost of SSNIT. The study further found out that upon membership, small business operator will have access to housing schemes, enjoy monthly pension income after retirement, access first class medical attention and also make good friends of common interest when they join the well-organized Pension Associations. The study recommends to SSNIT to streamline its operations in respect of doing away with contribution default prosecutions, high penalty levies as well as create alternate convenient channels for receiving periodic contributions. This way the Trust will appear attractive and pension friendly for a good number of small and micro business operators to join with their employees.